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Britain's top 100 Entrepreneurs 2009: Downturn dynamos

This year's ranking of Britain's Top 100 wealth-creators shows the harsh economic climate testing the mettle of small businesses as never before. But our pick of the entrepreneurs are up to the challenge, reports Philip Beresford.

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Published: 01 Jan 2009

Last Updated: 09 Oct 2013

Britain's economy may be on life support for the next year, but the
enterprise culture is far from dead. MT's annual survey of Britain's top
100 entrepreneurs and family businesses shows that some pockets of the
economy are still flourishing, shrugging off the gloomy outlook that is
causing so much pain economically and personally as unemployment
soars.

This is the sixth MT100, but the first to be published in the teeth of a
vicious recession that is biting all areas of economic activity and all
regions of the UK. That Britain's top entrepreneurs are holding their
own is vital in terms of economic activity and employment. Their
resilience offers the hope to those joining the dole queue that
flourishing businesses will one day be able to take them into
employment. They are an inspiration for those trying to start up a
business in these dark days.

Looking at two of our key measures of performance - growth in turnover
and employment - the MT100 have done themselves proud. In five years,
their average turnover has risen from £6.8m to £19.1m, a
near- tripling - spreading more economic activity round the UK. More
importantly, perhaps, their total headcount has risen in five years by
nearly 40,000, to 87,696. A word of caution: such is the speed and
ferocity of this downturn that some of our 100 members may have to shed
jobs. But at least they have shown that private-sector jobs can
flourish.

The MT100 are drawn from all industries, all parts of the UK and both
sexes. Some have appeared on the list before and remain when performance
merits it. This year's winner encapsulates all that's best about British
business in world-class performance and domination of a niche market. He
is Dr Mike Lynch, founder and CEO of Cambridge-based Autonomy, one of
the world's leading software groups. It helps companies archive and
retrieve electronically stored information regardless of the format it
is kept in - unstructured data, as it's known. His firm's business is
booming in the credit crunch. Little wonder: it was Autonomy software
that uncovered inconsistencies in the dealing records of Jerome Kerviel,
the rogue trader at Societe Generale.

But this year's MT100 is not just about software and the internet,
important as they are. Fully 40 of the 100 are drawn from industry - way
ahead of any other sector. Given the mauling that industry has had of
late, this is remarkable. Most if not all of the 40 are involved in
high-tech manufacturing, providing complex kit for the oil and gas
industry and the like. Some are niche players in the UK transport sector
or in providing equipment to clients in defence and aerospace. Mostly,
they prefer to let their results do the talking. Who, for example, apart
from those in the railway world, has heard of Fandstan Electric?

Built up by Lord Tanlaw (of the Inchcape shipping family), Fandstan is
heavily involved in railway electrification. It's highly profitable,
too: last year it made £8.7m on sales of £90.4m. If the
Government plumps for hefty infrastructure spending in the years ahead,
railway electrification would be a natural beneficiary. Indeed,
transport ministers hint that a rolling programme to string the wires
round the rail network is a serious runner, for environmental,
operational and job-creating reasons.

Lord Tanlaw and his fellow industrialists are the British Mittelstand:
niche manufacturing SMEs, often family-owned, beavering away in highly
specialist fields. There are not enough of them, but at least this year
we have upped our count from 27 to 40. It's a start.

The sheer diversity of the MT100 is helpful to the economy in these
extraordinarily difficult times. We have eight in computers, software,
internet and telecoms, representing high-tech Britain. We still manage
12 retailers, which should escape the worst that the recession can throw
at them. But, significantly, there's no construction tycoon, reflecting
how badly that sector is doing. Last year, we listed 10.

Sadly, the female headcount is down, too. We list just nine women; last
year, it was a record 29. One of the reasons for the fall is that some
of our most successful women entrepreneurs - such as Dawn Gibbins of
Flowcrete - have sold their businesses. Still, what we lack in numbers
we make up for in quality. An outstanding internet retailer is Natalie
Massenet, who founded online fashion boutique Net-a-porter.com in 2000
after stints as fashion editor at Women's Wear Daily and Tatler.

Britain's burgeoning Asian enterprise culture is also well represented,
with seven in our list (against five last year). They are drawn from all
over Britain and in sectors ranging from food production to computers
and distribution. But what is missing is any sudden growth in
entrepreneurs from the Muslim community.

We still see the dominance of London and the South East, with 30 from
this region. This is a fall from 33 last year and 44 on our 2006 list,
perhaps reflecting the negative economic impact on the ranks of City and
financial service entrepreneurs. Also doing well are the Midlands with
16, the North West (14), the South West (12) and the Yorkshire area at
10.

We have taken care to identify entrepreneurs who are as financially
robust as it is possible to be today. Though we concentrate on sales
growth, we keep one eye on profits too, and love our entrepreneurs to
have steadily increasing profits, which they re-invest in the firm
rather than take out as dividends or salaries.

This year, we have been eagle-eyed in our search for businesses with low
or no borrowings. In the past, highly geared companies could use rising
asset values or increased profits to keep bank managers happy. Now they
don't have that option, so we have rejected all businesses with high
gearing. Ideal candidates, of course, have their bank manager as
servant, not master. None has a better relationship with their bank than
brothers Alastair and Michael Powell, for instance.

These Teesside entrepreneurs run the nigh-on invisible Cleveland Cable
Company, which distributes specialist cable. With gearing of just 0.14%
and nearly £18m in the bank (and net assets just shy of £99m), Cleveland is clearly in good shape to weather the downturn. The
brothers' success comes just a couple of years after they hived off a
property operation, which has another £69m of net assets. Yet the
Powells never utter a word to the media. They let their actions speak
for them.

Our third measure is a valuation of the entrepreneur's stake in the
business and other assets, based on the stock market values (if quoted)
or their equivalent. Such valuations come with many caveats but serve as
a rough-and-ready guide. Collectively, the Top 100 are, by our
reckoning, worth just over £11bn, down sharply from last year's
£17.2bn, showing that this downturn is hitting the wealthy too.
What unites all in our list - veterans and young 'uns alike - is their
record of success. But with the perfect storm in the world economy,
they'll need to draw on their resilience and experience as never
before.